Getting Started

The main reason why I am choosing to blog about this is so that I can document and be reminded of all that we are doing to better our future. At some point to look back and think, "Wow! Can you believe we were once here?" Right where we are today. It is unreal to think that I will look back and read these first entries someday praising God for the chance we had. I cannot wait until that day of course. I wish I could snap my fingers and be there. I suppose that nothing good would come out of that. Can you imagine how life would be for all of us. No accountability, just a snap of your fingers and all trouble goes away. The other reason for putting this out here is to open readers eyes to the financial lifestyles we are living and how to be accountable to them and be debt free. "Our greatest financial investment is our own income", states Dave Ramsey. The average American will make around or over 1 million dollars, if not more, in their lifetime.



The MOST IMPORTANT thing before having a budget and starting on the road to being free from debt is that we MUST be in TOTAL agreement with one another to tackle this together. It will not work if only one of the partners wants it and the other isn't involved or doesn't want to do it.



The very first thing we did was call all of our credit card companies to get the exact current balances and to try and lower the interest rates. Then we wrote everything down. We elected to start off by having 4 categories: Debt, Monthly, Food/Gas, and misc. We then wrote down each and every debt.
*First was debt like credit card, line of credit, large dr balances, vehicle, department store, family, secod mortgage etc...
*Second, we wrote down all our monthly bills and musts like tithes, house, electricity, water/sewer, school tuition, phone, cell, internet, tv, etc.. (NOTE: Dave Ramsey does not count the home mortgage as a snowball debt at first. A second mortgage YES, but not the original. So we count it as monthly and not debt.)
*Third is food/gas. How many times to we each fill up a wk, multiplied by 4 wks. We gave ourselves a little breathing room for any extra driving ($25). We came up with a number for groceries and household products, (TP, cleaning supplies etc), We elected $250 for our family of 6 a month. I know that isn't much but I am mainly providing breakfast, box lunches and dinner. (will let you know how this works). We will adjust accordingly or as needed.
*Lastly we added misc for things like co-pays, and any dr bills from here. We elect this since we pay our dr bills as they come in. Unless it is a monthly bill due to a lg amount owed you would have it as debt. Also in this section is anything extra that may come up. Extracurricular activities for kids cost money, bdays, date night, allowance etc... (We have no set number yet. But it will be small.)



Once writing out our debts and bills, we did a lot of math. How much money goes where and what is left after all of this. We made any adjustments that were needed. We also know that we will have to adjust as time goes on. We sit down every two weeks when gets paid and we TELL our money where to go. Different months call for different budgeting. This is why it is crucial to sit down each and every paycheck and discuss and agree so we both know exactly where the money is going.



Another thing to do once you get your numbers all on paper is decide what works for your family. We have elected NOT to eat out for the time being. We do have reserve for a few things that are coming up but eating out doesn't seem worth it yet. If you elect to have an allowance then that must be written down as well. All money must be accounted for. Every last dollar!! Why? It's too easy to nickle and dime. Isn't that how we all got into debt in the first place. Little here and a little there. Before you know it you've spend $500 or a $1000. And we all know where it goes after that.



Then comes the hard part.... We CUT those credit cards. No need to "save" one for an emergency. We will not need it. We have not closed any accounts just cut the convenience of having a card for easy escape. From this point on we will be using our hard earned cash and not borrowing from anyone anymore!!!! (We do, and have kept our debit card. That is the only card and we ONLY use it for gas which we discuss the day before or morning of needing filled.)



Establish and Build an Emergency Fund
Save $1000 for emergencies.
After plugging the numbers we began to save for our emergency fund. We sold things that were no longer used, needed or wanted. If we can live without it we sold and are selling it. I love the quote from Dave Ramsey where he says "Sell so much that the kids think they are next." I thought that was humorous. Of course our children do not think they are next nor would we want them to be. We put every dollar that was earned and wasn't going to bills and debts to this fund. We have an account that is separate from all others. We have access to this account one way and one way only; Driving all the way to the bank (not real close to our home) and walking in and pulling it out. The more inconvenient it is to get it the less likely we are to be tempted to use or borrow from it. (which we shouldn't anyway. It is an emergency fund not a I spent money we didn't have and now need some to pay it back.)



Now that we have our $1000 in our fund we get to start rolling our snowball. This is where we are at now. All money in accounted for. Every last dollar. Whichever is the smallest balance (debt) is what we are attacking first. It is where the remainder of our paycheck goes. After the first month you will know and see where and how it will work for you. Whatever money is left over isn't a spending spree money or we have a hundred dollars to go get a pair of shoes I really wanted, it must go to the making of your snowball. So if I paid all my bills, debts, have my grocery cash and gas money put aside, I take the rest of the money and put it towards that first debt that I am attacking. Every penny counts for something. An individual snowflake will do nothing but with hundreds and thousands of them we can have a small snowball. The more we put towards debt the larger the snowball and the closer we are to freeing ourselves from the bondage on our debts.



Getting out of debt takes a lot of discipline, hard work, saying no to things you used to not even think twice about. For us personally, we have completely given up going out to eat, canceling our tv service, it can be watched on the Internet anyway, our land line, unnecessary driving, looking for coupons on the products I use, selling whatever isn't needed or used, downgrading vehicles (hopefully soon). When we need diapers we walk into the store and ONLY get diapers. No nick knack here and M&M's there. We have gone as far not purchasing gifts for extended family and friends this year. Our children will have small simple bdays that will not require money to be spent. Are people going to criticize us? Yes! Be upset with us? Yes! Not understand us? Yes! Is this extreme? Yes! Is it worth it? You bet! Is this sort of living temporary? Yes! To a point. We can have nicer cars later. We can buy gifts for family and friends with cash later. We are willing to live drastically now so that we can become free from the lenders that are sucking the life out of us. So we can live like we dream of living. So our children can have the option of a private school education, college fund, and even the weddings they dream of. All without refinancing, borrowing, and owing more and more and more and more! We are mad and ready for the life we have always dreamed of and wanted!